Classic Insurance Company ("CIC") brought this declaratory judgment action against its insured, Melissa Reiger, and Jeron Nelson to determine whether Reiger's policy covered injuries she sustained in a traffic accident. The trial court granted Reiger's motion for summary judgment and denied CIC's. In its sole enumeration, CIC challenges the amount of Reiger's award.
The parties agree that Iowa law controls. 1
See Fed. Ins. Co. v. Nat. Distrib. Co., 203 Ga. App. 763
, 765-766 (417 SE2d 671
) (1992). Uninsured motorist coverage is mandatory in Iowa. ICA 516A.1. Exclusions to uninsured motorist coverage for injuries to the policyholder while occupying an insured vehicle violate Iowa law. 2
Rodman v. State Farm &c., 208 NW2d 903, 909-910 (Iowa S.Ct. 1973) (construing ICA 516A.1). Uninsured motorist coverage may be omitted from liability policies in Iowa only when the named insured expressly rejects such coverage on a separate sheet of paper containing only the rejection. ICA 516A.1.
In light of 516A.1's clear mandate, CIC concedes that Reiger is covered. It disputes the amount of coverage it must provide, however, arguing that the statute limits its coverage to $20,000, the amount set in ICA 321A.1. Reiger maintains that she is entitled to coverage to her policy's $100,000 limit.
In striking an insured vehicle exclusion under identical circumstances, the Iowa Supreme Court reasoned that " 'the distinction that the uninsured motorist was the driver of the automobile in which [the] plaintiff [the insured] was a passenger, rather than the driver of another automobile, is not decisive. . . . [B]ecause she was excluded from the liability coverage of the policy, the automobile was not an insured automobile and the driver was not an insured motorist, notwithstanding that as to all others the automobile and the driver may have been insured. Because no liability insurance was applicable to the plaintiff at the time of the accident, her uninsured motorist coverage necessarily became effective in light of the legislative mandate.' [Cit.]" Rodman, 208 NW2d at 910. From this language, it follows that the invalid exclusion had no effect on the uninsured motorist coverage. See id. (citing Markham v. State Farm &c., 326 FSupp. 39, 45 (W.D. Okla. 1971) which required payment of the full amount of coverage provided under the policies). This finding comports with 516A.1's legislative purpose: to protect the insurance consumer, not insurers. Rodman, 208 NW2d at 909.
Notwithstanding CIC's argument to the contrary, 516A.1 does not require insurers to pay only the statutory minimum when a policy's drafters intended to provide no coverage in violation of Iowa law. The statute simply sets the minimum amount of coverage an insurer can sell. It is undisputed that Reiger purchased $100,000 in uninsured motorist coverage. "There is no reason to believe that the legislature intended to deny the purchaser of uninsured motorist coverage the protection he purchased just because the liability coverage is" inapplicable. Id. at 909. Nor is there any reason to believe that Iowa courts would reward an insurer for promulgating an exclusion violative of Iowa law by enforcing the statutory minimum when the insured paid premiums for $100,000 in uninsured motorist coverage.